Regulations not complied with in reporting ’03 campaign expenses

A number of candidates who participated in the 2003 general and special elections failed to comply with the election law and regulations in the filing of campaign statements of accounts—some because of their own fault and others due to unclear laws and regulations, the Office of the Auditor found.

OPA recently completed a review of campaign statements of account filed by candidates and political parties who took part in the 2003 elections.

OPA’s review covered 33 of the 66 candidates who ran for a seat in the Legislature and all the recognized participating political parties.

“Generally, OPA found that one candidate had failed to file the required CSA; candidates may be using campaign funds for personal expenses; candidates are not identifying, by name, supporters and contributors whose aggregate contribution is over $100; and supporting documentation for most of the CSAs was inadequate. OPA also found that two political parties submitted three CSAs each—one for Tinian and one for Rota; some containing no data,” public auditor Michael S. Sablan summarized the findings.

“OPA believes that most of what it found is the result of a lack of understanding of the Election Law, CEC regulations, and/or guidelines. OPA is making recommendations and suggestions designed to clarify the law, regulations and guidelines which may result in more complete and accurate campaign statements of account,” he added.

The report was prepared by OPA analyst manager Rosauro D. Zapanta and analyst Christopher M. Camacho. It was addressed to Commonwealth Election Commission executive director Gregorio C. Sablan.

According to the report, only one of the 83 candidates who sought office in the 2003 elections failed to file a CSA.

That candidate, Daniel O. Quitugua, did not file a CSA, although he requested and was granted an extension for filing. He was referred to the AGO and a penal summon was served through the Superior Court on Sept. 14, 2004.

OPA found that two of the 32 candidates in the test (excluding Quitugua) might have used campaign funds for personal expenses.

Herman T. Palacios reported a total of $541.20 as part of general expenditures. That included $200 for death donations, $141.20 for fruits given on a death anniversary, and $200 for a Red Cross fundraising raffle ticket.

Such expenditures are considered personal, OPA said.

Meanwhile, Manuel P. Villagomez reported a total of $700 in general expenditures, consisting of seven $100 payments for what he listed as “party.”

“Without more information, we could not conclude these expenses were for campaign purposes,” the analysts said.

Furthermore, Rep. Norman S. Palacios reported in-kind contributions valued at a total of $10,500 but failed to list the names of the contributors.

Palacios had told OPA that what he reported as $10,500 in-kind contributions was an estimated amount of food and drinks for six gatherings allocated to four legislative candidates by his Tinian political party, the Tinian Covenant Party. He had also said the he was not able to produce the list of the contributors because the party did not provide the names of the contributors.

Some provisions for reporting multi-candidate contributions and expenses in the Election Law and/or CEC regulations are not clear enough. As a result, candidates did not report contributions and expenses in a uniform manner.

“Candidates from the same political party and precinct should have reported similar amounts of party or precinct allocation of funds. Two of the three candidates from the same political party and precinct reported similar party/precinct allocations of funds as a receipt and disbursement, while the third candidate reported a different amount of allocation from the party/precinct only as a disbursement. The fourth candidate reported party/precinct allocation as a receipt and not as a disbursement,” OPA said.

The Public Auditor’s Office also found that 15 of the 32 candidates who filed and were tested, failed to provide accurate and detailed CSAs.

Interpreting the NMI Election Law and CEC Regulations, OPA said CSA were accurate and detailed if: there were no computation or transposition errors in the reported amounts; the prescribed form of the CSA and schedules were used and instructions followed; and the nature or type of the collections/contributions and payments/expenses can be ascertained based on the description written in the forms or based on the accompanying supporting documents.

OPA also found that four candidates reported excess campaign funds. Three of them reported excess funds amounting to less than $100. The other candidate, Ignacio V. Cabrera reported excess funds of $1,229.57.

None of the candidates identified a designated bank account where the excess funds are retained on the CSA.

Meanwhile, 22 of the 32 candidates who were selected for review reported deficit campaign fund balances. They did not provide information on how the deficits were paid.

Among these candidates are James D. Cabrera $8,010.50; Juan M. Ayuyu $7,304.45; Herman T. Palacios $6,029.08; Jose C. Mafnas $5,276.48; Manuel P. Villagomez $5,245.04; Francisco G. Demapan $3,926.44; Andrew S. Salas $3,623.05; Norman S. Palacios $3,300; Gerard B. Salas $2,787.33; Melvin Lawrence O. Faisao $2,171.50; Fermina Atalig $1,245.67; Heinz S. Hofschneider $1,244.81; and Pedro P. Castro $1,160.71.

As for political parties, the Covenant groups on Tinian and Rota failed to report any expenses or contributions for 2003.

The Saipan Covenant followed instructions in preparing its CSA, but OPA found minor inaccuracies and mathematical errors.

OPA’s review campaign statements of account submitted by the Republican Party showed that most of the contributions and expenditures reported by the party were not supported by any schedules or documents.

“Thus except for receipt from general contributions, a reviewer will not be able to ascertain the details and propriety of other reported contributions (totaling $26,603) and expenditures (totaling $25,970.59) in the CSA,” OPA said.

The Democratic Party also did not attach supporting documents to the 2003 CSA because—according to the chairman of the political party—the party treasurer was unavailable at the time of the filing, which started in the early part of August 2003 to the date of filing.

The Democrats reported contributions totaling $2,250 and expenditures totaling $4,524.39.

“Based on our survey of CSAs filed for the 2003 election, we found that, other than the one failure to file a CSA, there were no major cases of noncompliance with applicable laws and regulations regarding disclosure of campaign spending activities. Also, the reported amounts in a majority of the CSAs did not appear to be substantial enough to justify a full audit of financial records maintained by the candidates and political parties,” the analysts said.